House passes historic health-care reform bill

Vote is key procedural victory for Obama; action turns to Senate

WASHINGTON (MarketWatch) -- The House of Representatives late Saturday night approved a historic bill to remake the U.S. health-care system, delivering President Barack Obama a key procedural victory on his top domestic priority after a lengthy and sometimes emotional day of debate on the nearly 2,000-page measure.

By a vote of 220-215, lawmakers approved a 10-year, $1.055 trillion bill that aims to put in place near-universal health-care coverage in the United States, would require individuals to buy and most businesses to offer coverage, and expand Medicaid. Poorer Americans would get subsidies to buy insurance under the bill, and insurers would be barred from denying coverage to people with pre-existing conditions.

The bill would also establish a government-run health-insurance plan option to compete with private insurers -- the controversial "public option" strongly backed by Obama but sharply opposed by Republicans.

Just one Republican, Rep. Joseph Cao of Louisiana, voted for the White House-backed bill. A substitute bill offered by the GOP failed on a vote of 176-258. The House Democrats' bill will now need to be melded with a bill awaiting action in the Senate.

Obama said after the vote that the bill "will provide stability and security for Americans who have insurance; quality affordable options for those who don't; and bring down the cost of health care for families, businesses, and the government while strengthening the financial health of Medicare. And it is legislation that is fully paid for and will reduce our long-term federal deficit."

The president added that he is "absolutely confident" that the Senate will pass its version of the law, "and I look forward to signing comprehensive health insurance reform into law by the end of the year."

Before the vote, House Speaker Nancy Pelosi, D-Calif., said it was "an historic moment for our nation and for America's families."

House lawmakers began debating late Saturday morning and were immediately caught up in partisan fighting. But House Democratic leaders were upbeat about the bill's prospects after an early afternoon meeting with Obama, who made a rare Saturday trip to Capitol Hill to press members to pass the measure.

Obama made health-care reform a plank of his history-making presidential campaign and this year made a full-court press for an overhaul, lobbying members of Congress and stumping for reform in speeches around the country.

"This bill is change that the American people urgently need," Obama said in the White House Rose Garden after meeting lawmakers Saturday. "Now's the time to finish the job," he said, stressing that the bill is fully paid for and will lower health-care costs for families and businesses.

Action moves to Senate

Action on health reform now moves to the Senate, where a bill unveiled by Majority Leader Harry Reid, D.-Nev., is awaiting a cost analysis from the Congressional Budget Office. The Senate bill would let states opt out of the government-run "public option," but the overall Senate and House measures share broadly similar language.

House Democrats needed 218 votes for the bill to pass. Party leaders spent the week trying to shore up support from wavering members of the rank and file who were concerned about abortion and immigration language in the bill.

Members passed an amendment Saturday night that would bar federal funds for abortions. The vote was 240-194.

Thirty-nine Democrats voted against the health-care overhaul bill.

In spirited debate, Republicans charged that the Democrats' bill was an unprecedented expansion of government.

"Speaker Pelosi's takeover of health care spells disaster for patients and doctors," said Rep. Tom Price, R.-Ga., a physician. House Republican leader John Boehner of Ohio said the bill would actually raise the cost of health insurance, as well as create a "mega-bureaucracy."

House Democratic leaders say that their bill would extend coverage to 36 million Americans. It would set up health-insurance "exchanges" where consumers could shop for coverage, and expand Medicaid beginning in 2013 to people with incomes up to 150% of the federal poverty line. Illegal immigrants wouldn't be covered under the bill. See bill text.

Obama and other Democrats say the "public option" will keep private insurers honest and expand choice. Republicans charge it could lead to private insurers being pushed out of the market. The president of America's Health Insurance Plans, a trade group representing insurers, said after the vote that the public option would cause millions of people to lose their coverage.

Bitter business opposition

Business groups, meanwhile, bitterly oppose the requirement that employers provide their workers with health-care coverage. The requirement applies to all companies but those with annual payrolls under $500,000.

In a statement on Sunday, the Business Roundtable, an association of chief executives of top U.S. companies, said it was disappointed by the passage of a House bill that "will threaten the coverage that 177 million Americans currently have through their employer-based system."

The group objects to the government-run health plan and to what it calls the "'play or pay' mandate for employers that would limit the flexibility employers have to develop innovative plans" for employees. And withal, the Business Roundtable said, "the bill fails to meet the bipartisan goal of controlling costs."

Karen Ignagni, president and chief executive of America's Health Insurance Plans, a trade group for health insurers, had said in a Saturday statement that the House bill "fails to bend the health-care-cost curve and breaks the promise that those who like their current coverage can keep it.

"A new government-run plan will cause millions to lose their existing coverage, and draconian Medicare Advantage cuts will force millions of seniors out of the program entirely."

The AARP and the American Medical Association -- the powerful seniors' and doctors' groups, respectively - have said they support the bill.

AMA President J. James Rohack said in a Sunday statement that the bill "will significantly expand health-insurance coverage to Americans; empower patient and physician decision-making; institute meaningful insurance-market reforms; make substantial investments in quality; institute prevention and wellness initiatives; provide incentives to states that adopt certificate of merit and/or early offer liability reforms, and reduce administrative burdens."

Obama wants to sign a bill by the end of the year, but legislative action in the Senate could slip until early 2010 -- pushing the health-care debate into an election year. Read MarketWatch health reform coverage.

The House Republicans' bill would have allowed Americans to buy insurance across state lines, permitted small businesses to pool together and offer health care at lower prices, ended "junk" lawsuits and taken other steps. Read summary of Republican plan.

The Democrats' bill would be financed by about $500 billion in cuts to Medicare and Medicaid, as well as new taxes on high-income earners. Employers and individuals who don't buy coverage would also be required to pay fines.

Paying for the legislation is a key difference between the House and Senate measures. While the House bill would tax families making more than $1 million a year, the Senate's would tax insurers offering high-value plans.

The House's bill would also end a longtime exemption for the insurance industry from antitrust laws covering price-fixing and other things. An amendment with similar goals is expected to be offered on the Senate floor when lawmakers debate their version of the reform bill.

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